A real estate company owns 120 apartments which are fully occupied when the rent is $650 per month. Analytics indicate that for
each $25 increase in rent, 4 apartments will become unoccupied. What rent should be charged in order to obtain the largest gross income
2 answers:
Answer:
Check the explanation
Explanation:
This is a question under Calculus <em><u>(which is another segment of mathematics and it is utilized for understanding the changes between values that are related by a function. Calculus is used in a lot of diverse fields of study such as astronomy, physics, biology, economics, medicine, engineering and sociology).</u></em>
The step by step solution to the above question can be seen in the attached image below:
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Answer: $80 million per year for 25 years
Explanation:
The option you should choose is one that will guarantee you the highest present value.
This means that you need to discount the annual payment of $80 million per year for 25 years to find the present value. As you did not include a rate, we shall assume a rate of 8% for reference purposes.
The annual payment is an annuity so the present value can be calculated by:
Present value of annuity = Annuity payment * Present value interest factor, rate, no. of years
= 80,000,000 * Present value interest factor, 8%, 25 years
= 80,000,000 * 10.6748
= $853,984,000
<em>The present value of the annual payment is more than the present value of the $850 million received today so the Annual payment should be taken. </em>
Answer: MFP= 4.00±0.01
Explanation:
